Editorial Note: The Affordable Care Act reflects America’s need to address the lack of adequate, affordable health insurance and thus health care — a complex social problem that affects many, but is especially challenging for older adults who are not yet eligible for Medicare. AARP, the National Health Law Program, Services and Advocacy for Gay, Lesbian, Bisexual, and Transgender Elders, and the National Council on Aging filed an amicus brief to inform the Court about the special difficulties that those ages 50 to 64 faced in obtaining affordable health insurance and health care before the ACA’s reforms were implemented and how it has already saved lives and improved the health of many. It also details how eliminating premium tax credits on the federal Marketplace — a reform central to the ACA’s overarching purpose to achieve affordability and access for all — will acutely harm vulnerable older adults at a time in their lives when chronic conditions are more prevalent and the costs of health care consumes more and more of their limited incomes. Petitioners’ interpretation of the Act is so out of step with its text, structure and purpose that it would cannibalize its key reforms, placing millions of older adults back in the same crisis they faced before the ACA and placing their lives at risk.

AARP urged federal courts to uphold the Affordable Care Act’s provision of tax credits for people purchasing health insurance in states using the federal health insurance exchange.

Background

A provision of the Patient Protection and Affordable Care Act (or ACA, or “Obamacare”) makes available federal tax assistance with premium payments for individuals who buy insurance on the health insurance exchanges. Residents of the 36 states that did not set up state exchanges can purchase health insurance through the federal government site, healthcare.gov.

A group of individuals and some businesses sued to deny tax credits to those purchasing health insurance on healthcare.gov, arguing that the law was written to provide tax credits only to those who reside in states that set up their own exchanges, and that the premium tax credits were meant to be an incentive to states to create exchanges. In King v. Burwell, plaintiffs lost at summary judgment and on appeal. In Halbig v. Burwell, they lost at summary judgment but initially won on appeal; however subsequently the full D.C. Circuit agreed to rehear the case and set aside the decision of the panel.

AARP Foundation Litigation attorneys filed AARP’s and the National Health Law Program’s friend-of-the-court brief in both appeals, arguing that the tax credits are available for qualified purchasers on federal and state exchanges. The briefs point out that the ACA created incentives and obligations through a variety of complicated mechanisms. Reading one provision out of context is counter to the law and renders many other provisions meaningless or illogical. For example, denying tax credits to those who purchase health insurance on the federally-operated exchange will allow large employers to skirt their obligation to offer adequate and affordable health insurance to their employees. The briefs argue that plaintiffs misread the statutory language and ignore the intent of Congress, which is to make health insurance affordable to all individuals, not just those who reside in states that operate their own exchanges. After the court granted rehearing, the Southern Poverty Law Center joined AARP and NHeLP in filing an amicus brief for consideration by the full court. In addition to the arguments made before the three-judge panel, this brief also provided information about the impact that eliminating premium tax credits from the federally-facilitated Exchanges will have on the millions of low- to moderate-income pre-Medicare adults that have already purchased health insurance with federal financial assistance, and the many millions more that are projected to do so in the next decade.

What’s at Stake

Prior to the ACA, health care for many low-income pre-Medicare adults was unavailable, unaffordable, or inadequate. Many people were denied coverage based on preexisting conditions. Even without preexisting conditions, insurance premiums for older adults were up to seven times higher than for younger adults. Persons aged 50 to 64 are more likely to experience chronic health conditions, and have higher mortality rates from conditions that could be treatable if caught earlier (like cancer and heart disease). Those without insurance were three times less likely to be up to date with clinical preventive services than those who were insured. Those who enrolled in Medicare at age 65 tended to be in worse health and were more costly to the public than those who had been covered by insurance prior to becoming eligible for Medicare. If tax credits are denied to the almost 5 million qualified people who have purchased health insurance through the federal exchange, the insurance reforms in the health care law will not function and health care will continue to be unaffordable to millions of low-income Americans — with dire consequences for individuals, families, public health and public funds.

Case Status

The U.S. Supreme Court has agreed to review the decision in King v. Burwell. After Halbig v. Burwell was decided by a three judge panel, the U.S. Court of Appeals for the D.C. Circuit set aside the panel's decision so that the full court could rehear the case; but when the Supreme Court agreed to review King, the appeal was put on hold pending a decision in King.